How do Latin Americans Make Their Payments? Mastercard Reveals the Preferences Behind the Payment Methods of Choice in Latin America and the Caribbean
November 29 2023 - 12:12PM
Business Wire
- Presented at the LAC Innovation Forum 2023, Mastercard's new
research shows that trust in cards remains despite new digital
payment methods. Cards continue to be the most widely used digital
payment method with 80% of consumers using them, either online or
in-store.
- Additionally, debit cards rank as the most reliable digital
payment method, with 55% of consumers perceiving them as very
secure.
- Protection from fraud is the main factor influencing consumer
behavior when choosing a payment method.
The digitalization of the economy has gained more and more
momentum around the world and the Latin American and Caribbean
region has not been left behind. In an ever-changing world,
technological innovations are changing the way we interact every
day, and this extends to the payments industry, transforming the
way everyday payments are made and how people spend or manage their
money.
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To learn more about the main methods and factors that consumers
consider when making a payment, as part of the Mastercard LAC
Innovation Forum, Mastercard presents its new research that
investigates the payment behaviors of consumers in 14 countries in
Latin America and the Caribbean.
According to the main findings, over the past few years the use
of various alternative payment methods has increased: 77% of the
consumers have used electronic payments, with credit and debit
being the most utilized payment instrument both online and
in-store. Debit has been highlighted as the most important
digital payment method, used by 63% of consumers.
"Digitalization in Latin America is a phenomenon that is here to
stay, as it is presented as a solution to the needs that Latin
Americans face every day. Mastercard has been known for being at
the forefront of the most current technology trends and that
includes innovating at the pace of consumers. New payment methods
have become tools that facilitate payments and transfers, which is
why Mastercard has partnered with several digital wallets in
various markets in Latin America and the Caribbean with the aim of
providing the best payment experience to all consumers," said
Walter Pimenta, Executive Vice President of Products and
Engineering for Mastercard Latin America and the Caribbean.
With Open Arms: Latin American
Consumers Are Open to the Use of Technologies in
Payments
People in Latin America and the Caribbean continue to
demonstrate their openness to testing new payment methods and their
adoption of electronic payment methods. In this regard, cards
continue to be the preferred medium and use of alternative digital
methods has increased exponentially, while the use of cash has
decreased.
The use of cash has been declining in recent years, with a third
of consumers indicating that their preference for this option has
been displaced by the digitization of payments. In addition, more
than half of consumers surveyed (63%) indicated that they were very
comfortable using new technologies. In this context, it is worth
highlighting:
- Debit cards are the most used payment method, with a usage rate
of 55% and 41% for in-store and online purchases, respectively.
Here, Chile is the country with the highest penetration of debit
cards, both in-store (82%) and online (72%).
- 50% of consumers indicate that the adoption of electronic
payments is motivated by reducing the use of cash. The second
reason, with 45%, is due to the speed of the transaction. More
than in any other market in the region, 60% of Argentinian users
carry less physical money with them.
- While the introduction of new payment methods has increased,
consumers prefer digital wallets when making a purchase in a store
due to convenience (45%), speed (44%), and accessibility/user
experience (44%).
- Two-thirds of consumers use digital wallets for online or
in-store transactions. The countries that make the highest use
of this type of payment are Argentina and Uruguay, where more than
80% of consumers have used it.
- Digital wallets mainly appeal to young adults, even more so
when it comes to making online payments. 44% of consumers between
the ages of 18 and 30 cited convenience as the top factor driving
their online payment preferences.
- When making a purchase, 44% of consumers use a mobile device
to perform a transaction. The country where these devices
are most used for payments is Brazil (86%), while in Jamaica it is
the opposite, where this type of payment has not been implemented
for the most part (13%).
Security: A Key Factor in the Use of
Cards
Within the payments ecosystem, consumers are looking for
frictionless experiences that allow them to make and receive
payments easily, quickly, and most importantly, securely. Security
– and specifically the fear of fraud – is the main factor that
determines consumer behavior in relation to the payment methods
they use. In fact, 83% of Latin Americans indicated that
security features are the most influential aspect when choosing
which payment method to use, followed by the protection of consumer
financial information at 79%.
When it comes to thinking about secure payment methods, debit
cards take the top spot. According to respondents, debit cards are
the payment method they fully trust (36%), followed by bank
transfer (34%) and credit cards (27%). In this case, Uruguayan
respondents stand out, who with 67% are the ones who feel the
safest when making transactions with their debit cards, while
Colombians are the ones who find them less secure (11%).
"We know that cyberattacks are a growing concern in the Latin
American region for all consumers. People deserve the ability to
make payments conveniently, quickly and easily without compromising
their security. That's why Mastercard is continuously taking the
necessary actions to strengthen the protection of our consumers
through a holistic cybersecurity strategy. To ensure a secure
digital ecosystem, we use data analytics and AI to identify
vulnerabilities in advance and activate automatic protection
shields for all our consumers," said Pimenta.
Privacy as a top
priority
Consumers in Latin America and the Caribbean are highly
concerned about their data privacy in the world of digital
transactions, where 73% of respondents said privacy is a top
priority, and that they always choose payment methods that
protect user data.
Also, 96% say they take steps to protect their data.
Among the main measures that respondents take to protect their
privacy are:
- Using secure and reliable payment platforms – 45%
- Avoid sharing sensitive financial information online – 45%
- Use strong, unique passwords for financial accounts – 44%
Scope and methodology of the research Study markets
include Argentina, Brazil, Chile, Paraguay, Peru, Uruguay, Ecuador,
Colombia, Panama, Costa Rica, Mexico, Dominican Republic, Jamaica
and Puerto Rico. The research took place between November 1st 2023
and November 19th 2023 and consisted of a survey of 9,489 adults
aged 18 and over.
ABOUT MASTERCARD (NYSE:MA) Mastercard is a technology
company in the global payments industry. Our mission is to connect
and drive an inclusive digital economy that benefits everyone,
everywhere by making transactions safe, simple, smart, and
accessible. Using protected data and networks, partnerships, and
passion, our innovations and solutions help individuals, financial
institutions, governments, and businesses reach their greatest
potential. Our decency quotient, or DQ, drives our culture and
everything we do inside and outside our company. With connections
across more than 210 countries and territories, we're building a
sustainable world that opens up priceless possibilities for
everyone. www.mastercard.com
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Mastercard Rob Vila rob.vila@mastercard.com
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